Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

TSE Tokyo Price Index TOPIX / Technical Analysis

<ul>
<li>Major indexes in the three largest global equity markets (U.S., Europe, Japan) all remain below critical resistances of 5783 on SPX, 5000-5120 on EURO STOXX 50, and 2740-2820 on TOPIX</li>
<li>Additionally, broad global MSCI indexes (local currency) including the ACWI, ACWI ex-U.S., and EAFE all remain at/below resistance from their YTD highs; reduce exposure or shift to defensives.</li>
<li>In late-July we discussed expectations for a 1-to 4-month pullback/consolidation period on MSCI ACWI. We believe it seems likely to last closer to four months, and potentially 4- to 6-months</li>
</ul>


Major indexes in the three largest global equity markets (U.S., Europe, Japan) all remain below critical resistances of 5783 on SPX, 5000-5120 on EURO STOXX 50, and 2740-2820 on TOPIX
Additionally, broad global MSCI indexes (local currency) including the ACWI, ACWI ex-U.S., and EAFE all remain at/below resistance from their YTD highs; reduce exposure or shift to defensives.
In late-July we discussed expectations for a 1-to 4-month pullback/consolidation period on MSCI ACWI. We believe it seems likely to last closer to four months, and potentially 4- to 6-months


U.S., Europe, and Japan Still Holding Below Resistance; Favor Defensives

Executive Director, Metrical Inc

Aki Matsumoto

Executive Director

Independent Leading Corporate Governance Research

Metrical Inc

METRICAL INC. is an independent leading Corporate Governance research firm in Japan where Corporate Governance is increasingly recognized as an important element on corporate management in these days. Thus, CG research and solutions would become an essential component of global capital markets and play important to contribute to transparency of the markets and maximize shareholders’ value in Japan. 

METRICAL INC. provides Corporate Governance research and analysis including rating services, and  also offers investment research and IR services with solutions and customized profound research on CG and IR issues.

<ul>
<li>The first problem is that companies desperately match numbers, and original goal of ensuring board diversity has been lost; the second is the increase in the number of board memberships.</li>
<li>The low ratio of women in managerial positions has forced companies to rely on outside talent for female board members, which has further increased matching numbers.</li>
<li>There are problems both for the company that knowingly hires board members to serve concurrently in multiple companies and for the outside board members who knowingly accept such positions.</li>
</ul>


The first problem is that companies desperately match numbers, and original goal of ensuring board diversity has been lost; the second is the increase in the number of board memberships.
The low ratio of women in managerial positions has forced companies to rely on outside talent for female board members, which has further increased matching numbers.
There are problems both for the company that knowingly hires board members to serve concurrently in multiple companies and for the outside board members who knowingly accept such positions.


Companies Using Outside Board Members for Management and for Matching Numbers Will Widen the Gap

Asia L/S Equity PM/Macro/Thematic Idea Generation

Rikki Malik

Cross Asset Strategy

<ul>
<li>A monthly review of how the markets and our themes are currently performing</li>
<li>Analysing what went wrong and what went right in stocks and sectors</li>
<li>Highlighting positions added or removed from the thematic investment portfolio</li>
</ul>


A monthly review of how the markets and our themes are currently performing
Analysing what went wrong and what went right in stocks and sectors
Highlighting positions added or removed from the thematic investment portfolio


September Themes and Thematic Portfolio Review

<ul>
<li>Of the companies that have been removed from the list of companies subject to transitional measures, only about half have been able to meet the criteria for maintaining their listing.</li>
<li>It's not easy for companies applying transitional measures to comply with the criteria for maintaining listing, so it's realistic to move to a market with looser criteria for maintaining listing.</li>
<li>Besides problems with listing screening process, many managers consider IPO to be the goal and have little will to grow the company after listing, leading to slump in corporate value.</li>
</ul>


Of the companies that have been removed from the list of companies subject to transitional measures, only about half have been able to meet the criteria for maintaining their listing.
It's not easy for companies applying transitional measures to comply with the criteria for maintaining listing, so it's realistic to move to a market with looser criteria for maintaining listing.
Besides problems with listing screening process, many managers consider IPO to be the goal and have little will to grow the company after listing, leading to slump in corporate value.


Slightly More than the Annual IPOs, 119 Companies Newly Applied for Transitional Measures This Year

<ul>
<li>Certainly, the “TSE's request” has begun to change companies' mindsets, but what we focus on now is whether they have put the plan into action and whether it's producing results.</li>
<li>The importance of investor engagement is also indicated in the Japan Investor Relations Association's survey summary. Companies that receive overseas investor engagement are furthering their efforts to improve profitability.</li>
<li>Even among companies with high IR awareness, few have taken serious steps to reform their business portfolios, as under 60% have begun to reform business portfolios.</li>
</ul>


Certainly, the “TSE's request” has begun to change companies' mindsets, but what we focus on now is whether they have put the plan into action and whether it's producing results.
The importance of investor engagement is also indicated in the Japan Investor Relations Association's survey summary. Companies that receive overseas investor engagement are furthering their efforts to improve profitability.
Even among companies with high IR awareness, few have taken serious steps to reform their business portfolios, as under 60% have begun to reform business portfolios.


Not Many Companies Have Implemented Full-Scale Improvements in Return on Capital

Japan

The TOPIX, also known as the Tokyo Stock Price Index, is a capitalization-weighted index of all companies listed on the First Section of the Tokyo Stock Exchange. The index is supplemented by the subindices of the 33 industry sectors. The index calculation excludes temporary issues and preferred stocks, and has a base value of 100 as of January 4, 1968.

TSE Tokyo Price Index TOPIX (TPX INDEX)

U.S., Europe, and Japan Still Holding Below Resistance; Favor Defensives

U.S., Europe, and Japan Still Holding Below Resistance; Favor Defensives. Actionable Themes: Real Estate, Utilities, Telecommunications, Energy,...

Vermilion Research

Companies Using Outside Board Members for Management and for Matching Numbers Will Widen the Gap

I would like to discuss the issues on the August 22 Nikkei Shimbun article, “Ratio of Women Outside Directors of Prime Market Listed Companies...

Metrical Inc

September Themes and Thematic Portfolio Review

We review overall market performance, our investment themes, highlighting additions and substractions in the thematic portfolio.

Rikki Malik

Slightly More than the Annual IPOs, 119 Companies Newly Applied for Transitional Measures This Year

I would like to discuss the material “Status of Companies to Which Transitional Measures are Applied” disclosed by TSE on August 19, 2024.

Metrical Inc

Not Many Companies Have Implemented Full-Scale Improvements in Return on Capital

I would like to discuss the August 19 Nikkei Shimbun article, “80% of listed companies are ‘conscious of cost of capital and stock price,’...

Metrical Inc